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Eight Tips for Mediating High-Profile Construction Disputes

JAMS ADR Blog by Chris Poole

Large-scale global construction disputes often present a complicated mix of factors, such as publicity-associated risks, government oversight, huge project size, a large number of implicated parties and momentous damage issues. At the International Association of Lawyers (UIA) 29th World Forum of Mediation Centres on June 24, 2021, I had the opportunity to moderate a conversation on this topic with panelists Steven Nelson of Texas, Professor Stefan Leupertz of Germany and Christopher Miers of the United Kingdom. Our discussion included perspectives from practitioners and neutrals who have experience helping to resolve conflicts involving some of the world’s most recognized buildings and sites. We offered a host of valuable lessons for neutrals, counsel and parties to consider when negotiating highly visible and newsworthy construction disputes.

I have distilled our discussion into eight key highlights, tips and takeaways:

  1. Build trust and understanding through robust pre-session preparation with the mediator.
    The mediator and parties should work together in advance of the mediation to devise an agreed-upon process to exchange information—if necessary, in a series of meetings or conferrals—so that everyone will trust the settlement process and understand one another’s positions on the technical, insurance, legal and damages issues relevant to settlement.
  2. Understand “big picture” issues and ensure key decision-makers are involved, engaged and present.
    The mediator should determine, as early in the process as possible, the identities of the key decision-makers, whether there are entities who are not “at the table” but who need to be involved, which other disputes may be implicated by the settlement of this one and how to include all necessary issues and persons in the negotiations at hand.
  3. Set expectations for a full mediation process of multiple and ongoing conversations and negotiations.
    It is important that the parties and mediators understand that in these types of disputes, mediation will most likely not be a one-time event. It may involve a series of sessions, each for a particular purpose, such as educating the parties or mediator, establishing ground rules and addressing high-priority issues.
  4. Clearly explain and respect confidentiality parameters, and use curated caucuses to allow for frank exchanges.
    Parties need to know that they can openly express their concerns to the mediator and the other parties, and that they won’t be disclosed to anyone outside the “room.” This may involve putting parties who have similar interests into groups so that they can speak more freely with each other. The involvement of governmental overseers or decision-makers requires special considerations and confidentiality.
  5. Leverage focused sessions with technical experts to hone in on areas of agreement and difference.
    The idea of splitting participants into groups can also work well if the mediator brings together all of the technical experts involved in the dispute—perhaps without the parties or counsel present—so that they can discuss with each other and with the mediator where consensus can be obtained and better understand what remains in dispute or unknown.
  6. Use the neutrality of mediator proposals to mitigate any perception of capitulation.
    Mediator proposals can be especially helpful to overcome situations where corporate or governmental representatives present at the mediation may not have the authority to bind the party they represent, so they must make recommendations to others who have higher authority and may be sensitive to public criticism. The mediator can “take the blame” for the substance of the proposal, which then saves face for those in a decision-making hierarchy who may agree with and recommend that proposal, but without implying that they have personally concluded that the party they represent is guilty or at fault.
  7. Turn to additional neutral assessments to bolster a settlement’s fairness and inoculate against any appearance of damaging admissions.
    Another way to broach the same sensitivities is for the mediator to arrange for non-binding evaluation by another neutral or neutral panel, or hold a mock jury trial, based on an expedited presentation of the parties’ evidentiary positions. This way, the parties can rely on this independent evaluation as a basis for settlement, without appearing to admit any fault.
  8. Establish standing neutrals who are on call to address issues in their infancy in order to avoid full-blown disputes.
    Finally, the panel agreed that an excellent way to resolve disputes on high-profile projects is to avoid public disputes altogether through use of standing neutrals, similar to or in the form of dispute resolution boards. These experts in construction contracting, the construction techniques of the project and/or the legal obligations of the parties can be retained at the outset of the project to essentially stand by to resolve issues as they arise, as well as meet regularly with the parties, keeping them informed of the progress of the project and the issues under discussion on a real-time basis. They also can provide a ready forum in which parties may address disagreements or concerns at their infancy, when they can most easily be resolved.
                        author

Patricia Thompson

Patricia H. Thompson, Esq. joins JAMS after an esteemed career as a trial and appellate lawyer and arbitrator, concentrating her practice in construction, employment, surety, fidelity, financial insurance matters and other complex commercial disputes in state and federal courts.  MORE >

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